Trump taps Lighthizer for U.S. Trade Representative

President-elect Donald Trump has picked lawyer Robert Lighthizer to head the U.S. Trade Representative office, his transition team said Tuesday in a further sign the incoming administration will take a tougher line on China.

“He has extensive experience striking agreements that protect some of the most important sectors of our economy, and has repeatedly fought in the private sector to prevent bad deals from hurting Americans,” Trump said in an e-mailed statement. “He will do an amazing job helping turn around the failed trade policies which have robbed so many Americans of prosperity.”

Lighthizer, 69, who was deputy trade representative during the Reagan administration, would replace Michael Froman, the Obama administration’s representative who led negotiations on a Pacific trade pact that would have covered nearly 40% of the global economy and was seen as a counterpoint to China’s rising clout.

Trump, however, argues that deals such as the North American Free Trade Agreement and the Trans-Pacific Partnership kill American jobs. He has vowed to make smarter deals and slap punitive tariffs on countries that violate trade rules, particularly China -- a frequent target of his attacks.

As a partner at the Washington offices of law firm Skadden, Arps, Slate, Meagher & Flom LLP, Lighthizer has focused on traditional trade litigation, policy advice and legislative initiatives for a roster of large U.S. corporations and coalitions, according to the firm’s website.

Lighthizer has previously accused China of unfair trade practices, in line with views held by Peter Navarro, a China critic who Trump last month named to head a newly formed White House National Trade Council. In a 2011 article published in the Washington Times, Lighthizer said that using tariffs to promote American industry was a Republican tenet harking back to pro-business politicians who established the party.

‘Rig Trade’

“The icon of modern conservatism, Ronald Reagan, imposed quotas on imported steel, protected Harley-Davidson from Japanese competition, restrained import of semiconductors and automobiles, and took myriad similar steps to keep American industry strong,” Lighthizer wrote. “How does allowing China to constantly rig trade in its favor advance the core conservative goal of making markets more efficient? Markets do not run better when manufacturing shifts to China largely because of the actions of its government.”

The choice of Lighthizer would make sense because Trump’s economic plan is “Reagan-esque,” said He Weiwen, deputy director of the Beijing-based Center for China and Globalization and a former business attache in Chinese consulates in New York and San Francisco.

“In the second term of Reagan’s administration, his trade team put a lot of pressure on Japan in bilateral negotiations,” He said. “If Lighthizer is picked, a hardline approach towards China can be expected.”

Trump has also linked geopolitical matters to America’s trade ties, suggesting his administration will consider the behavior of countries on defense and security in the framework of its economic relationships.

Geopolitical Tensions

Trump via Twitter on Monday warned that nuclear aggression from North Korea won’t be tolerated, and castigated China for not taking a stronger stance. China is the major trading partner of Kim Jong Un’s reclusive regime and a key source of its energy shipments. As such it has been seen in the past as holding some sway over Pyongyang’s behavior.

“North Korea just stated that it is in the final stages of developing a nuclear weapon capable of reaching parts of the U.S. It won’t happen!” Trump tweeted.

And later: “China has been taking out massive amounts of money & wealth from the U.S. in totally one-sided trade, but won’t help with North Korea. Nice!”

The office of the U.S. Trade Representative is part of the Executive Office of the President, responsible for developing international trade and investment policy, overseeing trade negotiations and representing American interests at the World Trade Organization.

Agriculture, Veterans

Trump chose Lighthizer after considering several others, including Jovita Carranza, a former executive with United Parcel Service Inc. who served as deputy administrator for the U.S. Small Business Administration under President George W. Bush. Dan DiMicco, former head of steel-maker Nucor Corp., was also considered.

Lighthizer met Trump at his Mar-a-Lago club in Florida on Dec. 19. The president-elect is closing in on a full selection of cabinet nominees. Now that he has settled on his trade representative, top posts yet to be filled are agriculture secretary, veterans affairs secretary, and chairman of the Council of Economic Advisers.

Former Georgia Governor Sonny Perdue is the front-runner for agriculture secretary, though the search continues, transition officials told Bloomberg on Monday. Trump’s top choice for veterans affairs, Cleveland Clinic chief Toby Cosgrove, has withdrawn from consideration.

Ag reaction

The American Farm Bureau Federation issued a statement saying they look forward to working with Lighthizer

“America’s farmers and ranchers know unfair regulations, steep tariffs and senseless non-tariff barriers undermine our exports," AFBF president Zippy Duvall said. "We must work together to remove these obstacles to prosperity and identify new global opportunities that will benefit American agriculture.

“Economic growth in rural America depends on maintaining and increasing access to markets outside the United States. Since more than 95% of the world’s population lives outside our borders, expanding access to international markets is essential for our future success. We trust Mr. Lighthizer will work tirelessly to assure it.”

The National Milk Producers Federation and U.S. Dairy Export Council issued a joint statement, saying they look forward to continuing to talk with the incoming Trump administration on the importance of "well-negotiated" trade agreements.

“The U.S. dairy industry, like most other agricultural sectors across America, has significantly benefited from the agricultural provisions of prior U.S. free trade agreements," they said. "At the same time, however, we face a growing wave of nontariff barriers that threaten to impede overseas sales. Our NAFTA partners epitomize both sides of that story: Our dairy agreement with Mexico has created an export market worth well over $1 billion a year, while on the other side of the border Canada has at every opportunity decided to flout its dairy trade commitments to the U.S."

--With assistance from Ting Shi and David Tweed. To contact the reporter on this story: Jennifer Jacobs in Washington at mailto:jjacobs68@bloomberg.net